Deal focus: Investors bring new lift to Rocket Lab

The second successful launch of its Electron rocket from New Zealand’s Mahia Peninsula this month has given Rocket Lab a renewed burst of momentum. Along with the deployment of seven satellites on behalf of commercial clients, the company began construction on its second launch site in the US and announced plans for a weekly launch rate by the end of 2019.

Investors in the company had already given it their vote of confidence prior to the takeoff, with Australia’s Future Fund, Data Collective, Khosla Ventures, Bessemer Venture Partners, and others contributing a Series E round of $140 million. Backers are confident that Rocket Lab has the skills and drive to gain a critical foothold in the burgeoning commercial space market.

“For anyone like Rocket Lab that can provide the capability of getting a small satellite into space swiftly and inexpensively, this is as transformative as it would have been to be the dominant operator of clipper ships in the era when everybody else was slower and more expensive, or to be the dominant provider of rail technology in the early US,” says Matt Ocko, a managing partner at Data Collective.

With a line of rockets incorporating lightweight materials and new technologies such as 3D printing, Rocket Lab aims to become the low-cost global space provider of choice, particularly for smaller companies. The new investment will help it accelerate production of Electron and construction on the new launch complex in Virginia.

This complex is in part a push to capture opportunities from US customers, including government clients with unexportable payloads. But it also means that Rocket Lab will be able to access a wider range of orbits with a more flexible launch schedule, and ultimately open up space access for new and innovative applications.

“If you can get to space frequently and reliably, you can partner with existing customers to deliver their payloads. But you can also find ways to be more inclusive and more enabling to the wider industry,” says Ocko. “I can’t say exactly what shape that will take – obviously there are logical extensions of existing technology like new engines, heavier payloads, and higher orbits, but that’s just table stakes.”

The global growth ambitions of Rocket Lab are seen as a milestone for New Zealand’s entrepreneurial ecosystem. The government hopes it can develop along the lines of Israel, a country with a small population and limited natural resources that nevertheless has developed a surging homegrown tech industry.

“There’s no reason that New Zealand, with a comparable population, an equally smart and driven people that care about their country’s future, and lots of natural resources, shouldn’t be a dominant technology export economy of its own,” says Ocko. “We’re beginning to see the can-do tradition of New Zealand combined with lots of smart people and a supportive government to create a set of national tech champions.”

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• Topics
• Australasia
• North America
• Expansion
• Technology
• New Zealand
• USA
• Future Fund
• Bessemer Venture Partners
• Khosla Ventures
• Growth capital
• Logistics